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Industrial rents up 0.2% in 4Q21, sees best full-year performance in eight years

Atiqah Mokhtar
·3-min read


Singapore’s industrial property market saw the highest rent and price growth in eight and nine years respectively in 2021. (Credit: Samuel Isaac Chua/The Edge Singapore)

SINGAPORE (EDGEPROP) - Industrial rents and prices continued their upward trend for a fifth consecutive quarter in 4Q202, according to statistics released by JTC on Jan 27.

Read also: Singapore’s industrial sector to continue growth in 2022: Knight Frank

Overall industrial rents inched upwards by 0.2% q-o-q in 4Q2021 while overall industrial prices rose by 1.4% q-o-q. On a y-o-y basis, overall industrial rents and prices grew 2% and 4.4% respectively.


Source: JTC 4Q2021 Industrial Market Report

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“Singapore’s industrial property market turned in a stellar performance in 2021, chalking up the highest rent and price growth in eight and nine years, respectively,” says Tay Huey Ying, head of research and consultancy, Singapore at JLL. (Check all latest Singapore property Market Trends)

Tay notes that the performance was underpinned by the buoyant manufacturing sector which saw growth accelerating from 7.3% in 2020 to 12.8% in 2021, based on advance estimates.

This led to a healthy industrial leasing market that saw leasing volumes reaching a record high. According to J-Space, some 13,081 tenancies were sealed in 2021, up 18.8% y-o-y, and the highest annual leasing volume captured since the start of the series in 2000.

This comes despite a weakening in overall industrial leasing demand in 4Q2021 as absorption fell significantly to 18,000 sq m from 220,000 sq m in the previous quarter. Lam Chern Woon, head of research & Consulting at Edmund Tie, notes that the lower absorption in 4Q2021 is a reflection of the low supply completions of just 11,000 sq m during the quarter rather than an outright softening of demand.

In terms of submarkets, the single-user factory segment was a standout in 4Q2021, with rents and prices registering the greatest improvement of 0.7% q-o-q and 1.5% q-o-q respectively, as compared to other industrial segments.

“The pronounced interest for single-user factory spaces coincides with some slowdown in the manufacturing growth across the region towards the end of last year, and smaller industrialists have likely taken a backseat in activity, resulting in the market pivoting towards larger single-user factory spaces,” says Edmund Tie’s Lam.

Warehouse rents increased by 0.4% q-o-q and 2.7% y-o-y, its first annual rent increase in eight years. JLL’s Tay notes the increase came amid a tightening in the islandwide warehouse vacancy rate to 10% as of end-2021, its lowest level in six years. “We believed the warehouse rent growth was led by facilities with better specifications,” he adds.

Overall industrial occupancy stayed flat at 90.1% in 4Q2021. Notably, the occupancy rate for multi-user factories increased 0.4% q-o-q to 90.2% in 4Q2021 as manufacturing activity continued while occupancy for business parks improved by 0.2% q-o-q to 84.5% in line with the improvement in demand for quality office spaces.

However, this was offset by declines in occupancies for single-use factories and warehouses, which both fell 0.1% q-o-q respectively.

Occupier demand for industrial space is expected to stay healthy in 2022, driven by requirements from growth industries such as the food, electronics, media, e-commerce, technology and life science sectors. Logistics and warehouse demand is also expected to remain firm.

Leonard Tay, head of research at Knight Frank Singapore, expects healthy demand and expanding activity in the sector to support industrial rent and price increases of between 3% and 5% for the whole of 2022.

However, the anticipated surge in new supply in 2022 could cap rent growth. “Based on JTC’s statistics, over 2 million sq m of industrial space could be ready in 2022. This is a substantial increase from the 739,000 sq m of net space addition in 2021,” says JLL’s Tay.

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